Two more coal plants bite the dust

FirstEnergy is
planning to shut down two coal-fired power plants in western Pennsylvania
within the next few months, an announcement today that is bad news for the coal industry for many
reasons.

The Akron-based utility is blaming the cost of environmental compliance for the decision to
deactivate plants in Masontown and Courtney, Pa. Together, the plants' capacity is 2,080 megawatts,
which is about 10 percent of FirstEnergy's overall capacity. One megawatt provides enough
electricity to serve about 1,000 houses.

If you are a coal executive or worker, the loss of the two plants will mean less demand for your
product at a time when the coal industry is already suffering.

Notably, one of the plants is a "supercritical" generator, which means it uses a high-pressure
system to produce more electricity relative to its harmful emissions. By shutting down a plant that
is relatively efficient, FirstEnergy could be seen as signaling that coal is a risky bet going
forward.

Julian Dumoulin-Smith, an analyst for UBS Securities, said in a research note today that he sees
FirstEnergy's announcement as the start of a fresh wave of shut-downs.

"We also view today’s announcement as potentially indicating that yet further retirements may be
coming," he said, listing American Electric Power and Duke Energy as companies to keep an eye
on.

Environmentalists will applaud today's news, but it is a bad day for hundreds of families with
jobs tied to the plants. FirstEnergy estimates that 380 employees will be affected.